New Delhi, April 1 (Reuters): Coal India’s (COAL.NS), sales in March grew for the first time in six months, the company said on Wednesday, indicating a ramp-up in coal stocks ahead of peak summer amid a shortfall in gas supply due to the U.S.-Israeli war against Iran.
Coal India’s offtake, or sales to customers, rose 0.7% to 69.5 million tons in March, despite a 1.5% drop in its provisional output to 84.5 million tons, the company said in a stock exchange filing.
The state-run company accounts for over 80% of the country’s production and is the world’s largest coal miner by output.
Coal India’s offtake fell for six consecutive months after a 7.6% jump in August, boosting inventory levels at power plants as temperate weather dented India’s power demand in 2025.
The higher stocks have kept import demand subdued despite the peak summer season approaching, said Vasudev Pamnani, director at Gujarat-based coal trader iEnergy Natural Resources.
Domestic coal remained relatively more attractive in certain segments, he said, adding that disruptions in liquefied natural gas supply and reduced gas-based power generation are expected to boost reliance on coal for power generation.
India, which relies on coal for nearly 75% of its power generation, is expected to lean more on the polluting fuel during the summer due to the gas shortage, Reuters reported in March.
Although gas accounts for only around 2% of India’s total power generation, the South Asian country uses about 8-10 gigawatts (GW) of gas power during peak-demand periods or heatwaves.
In the absence of gas, India has asked its coal plants to run at maximum capacity and avoid planned outages, and has also asked industries to produce their own power through their captive generation plants to free up supplies for households.
India is set to experience a hotter-than-normal summer this year, with heat wave days in May expected to exceed the seasonal average.
This report is given by Reuters. The Sen Times holds no responsibility for its content.
FAQs
Why did Coal India’s sales increase in March 2026 for the first time in six months?
Coal India’s sales rose by 0.7% to 69.5 million tons in March 2026 as power plants ramped up inventories ahead of a hotter-than-normal summer. This increase marks a reversal of a six-month decline and is driven by a critical need to offset a national shortfall in natural gas supply caused by the ongoing U.S.-Israel-Iran conflict.
How is the gas supply shortage affecting India’s power generation mix?
The shortage of liquefied natural gas (LNG) has forced India to maximize its reliance on coal-based power, which currently accounts for nearly 75% of the country’s total generation. While gas typically contributes only 2% to the grid, the current deficit removes roughly 8–10 gigawatts (GW) of critical “peaking power” normally used during extreme heatwaves.
What impact will the 2026 summer heatwave have on domestic coal demand?
An anticipated hotter-than-normal summer with excessive heatwave days in May is expected to drive coal demand to record levels as air conditioning use spikes. Research shows that domestic coal remains more economically attractive than imported alternatives, further incentivizing state-run utilities to prioritize internal supply chains over international spot market purchases.
Should industries prepare for power supply disruptions during the peak of 2026?
Industries should prepare for potential grid prioritizations as the government shifts focus toward maintaining household electricity during peak-demand periods. By producing their own electricity through captive plants, large-scale industries can mitigate the risk of forced load-shedding while helping the state manage the 10 GW deficit caused by the natural gas shortage.
How is the Indian government managing electricity distribution to prevent household blackouts?
The Indian government has issued directives for coal plants to operate at maximum capacity and instructed industries to utilize captive generation to prioritize residential supply. By shifting industrial loads to self-produced power, the state aims to free up approximately 8–10 gigawatts (GW) of grid capacity normally lost during peak-demand heatwaves and gas shortages.
What role does the U.S.-Israel-Iran conflict play in India’s current energy strategy?
The regional conflict has caused a significant shortfall in the global gas supply, forcing India to pivot toward domestic coal to meet its energy requirements. This geopolitical disruption in liquefied natural gas (LNG) delivery has made domestic “thermal utilities” the primary safeguard against a widespread energy crisis during the 2026 summer season.
